XBKS Xenith Bankshares, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,  D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)    August 7, 2014 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 2.02.      Results of Operations and Financial Condition.

 

Hampton Roads Bankshares, Inc. (the “Company”), the holding company for The Bank of Hampton Roads and Shore Bank, issued a press release today regarding financial results for the second quarter of 2014, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Use of Non-GAAP Financial Measures.

 

Certain measures provided in the press release attached as Exhibit 99.1 may be deemed to be non-GAAP financial measures.  Tangible common equity to tangible assets ratio is not a measure recognized under U.S. generally accepted accounting principles (“GAAP”) and, therefore, is considered a non-GAAP financial measure.  The most comparable GAAP measure is the ratio of total common shareholders’ equity to total assets.

 

Management uses this non-GAAP financial measure to assess the strength of the Company’s capital position.  The Company believes that this non-GAAP financial measure provides meaningful additional information about the Company to assist investors in evaluating the Company’s financial strength and capitalization.  The tangible common equity to tangible assets ratio is used by management and investment analysts to assess the strength of the Company’s capital position absent the effects of intangible assets.  Management, banking regulators and many stock analysts use the tangible common equity ratio in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of intangible assets.

 

Below is a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP.

 

 

 

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Item 7.01.      Regulation FD Disclosure.

 

As noted in Item 2.02, the Company issued a press release regarding its financial results, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

The information contained in Item 2.02 above and this Item 7.01, including that which is incorporated by reference, is being furnished to the Securities and Exchange Commission (the “SEC”).  Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section.  The information shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

 

Item 9.01.       Financial Statements and Exhibits.

 

Ex. 99.1           Press Release, dated August 7, 2014,  announcing Hampton Roads Bankshares, Inc.’s  second quarter 2014 financial results. 

 

Caution About Forward-Looking Statements.

 

Certain statements made herein and in the attached earnings press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise are not statements of historical facts, including statements about future trends,  benefits, opportunities and strategies.  Although the Company believes that its expectations with respect to such forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from those expressed or implied by such forward-looking statements.  Factors that could cause actual events or results to differ significantly from those described in the forward-looking statements include, but are not limited to those described in the cautionary language included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, Quarterly Report on Form 10-Q for the quarter ended March 31, 2014,  and other filings made with the SEC.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

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EXHIBIT INDEX

 

 

 

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August 7, 2014

 

Contact:Douglas J. Glenn

President and Chief Executive Officer

(757) 217-1000

 

Hampton Roads Bankshares Announces Second Quarter Financial Results

 

VIRGINIA BEACH, Va., August  7, 2014 (GLOBE NEWSWIRE) -- Hampton Roads Bankshares, Inc. (the “Company”) (Nasdaq: HMPR), the holding company for the Bank of Hampton Roads and Shore Bank, today announced financial results for the second quarter of 2014.  Net income available to common shareholders for the three and six months ended June 30, 2014 was $2.5 million and $6.3 million, respectively, as compared with net income for the three and six months ended June 30, 2013 of $89 thousand and $721 thousand, respectively.

“Our operating performance in the second quarter has allowed us to make continued, strategic investments in the Company that we believe will benefit our shareholders, employees and customers over the long term,” said Douglas Glenn, President and Chief Executive Officer.   "Our commitment to developing a strong and vibrant corporate culture is also resonating in our markets and has attracted talented individuals who we believe will create new opportunities for our company and serve to enhance the customer experience."

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Net Interest Income

Net interest income decreased $1.1 million and $2.0 million in the three and six months ended June 30, 2014 compared to the same periods in 2013. The decreases were due primarily to the decreases in average interest-earning assets, and a slight decline in net interest margin.

Credit Quality

Our non-performing assets ratio was 4.19% and 5.29% at June 30, 2014 and December 31, 2013, respectively. The non-performing assets ratio is defined as the ratio of loans 90 days past due and still accruing interest plus nonaccrual loans plus other real estate owned and repossessed assets to gross loans plus loans held for sale plus other real estate owned and repossessed assets.

 

Allowance for loan losses at June 30, 2014 decreased 25.6% to $26.1 million from $35.0 million at December 31, 2013 as net charge-offs of previously identified impaired loans exceeded additional provisions for loan losses. 

 

Noninterest Income

 

Noninterest income for the three and six months ended June 30, 2014 was $5.5 million and $12.8 million, respectively, a decline of 27.2% and 1.5% from the same periods in 2013.  A major driver of this decline is mortgage banking revenue which decreased $1.1 million or 26.0% and $5.3 million or 51.5% during the three and six months ended June 30, 2014, respectively, compared to the same periods in 2013.  The decrease in mortgage banking revenue is due to declines in both origination volume and margin, driven by rising market interest rates, which resulted in a negative impact on refinance demand.  Offsetting these declines were decreases in losses on premises and equipment associated with certain branch closings that occurred in 2013, decreases in other than temporary impairment of other real estate owned and repossessed assets, and an increase in income from bank-owned life insurance due to life insurance benefits received in excess of cash surrender value.

 

Noninterest Expense

 

Noninterest expense finished at $17.7 million and $36.2 million for the three and six months ended June 30, 2014, respectively, representing declines of $4.5 million or 20.2% and $5.4 million or 13.0%, compared to the same periods in 2013, primarily due to lower salaries and employee benefits, occupancy and FDIC insurance expenses.

 

Balance Sheet Trends

 

Assets were $2.0 billion at June 30, 2014.  Total assets increased by $25.2 million or 1.3% from December 31, 2013.  The increase in assets was primarily associated with a $29.3 million or 68.4% increase in overnight funds sold and due from FRB, a $21.3 million or 6.5% increase in investment securities available for sale, a $9.0 million or 25.6% decrease in the allowance for loan losses, and a $5.5 million or 21.7% increase in loans held for sale. These increases were partially offset by a $20.7 million or 1.5% decrease in gross loans, and a $14.3 million or 38.9% decrease in other real estate owned and repossessed assets.

Gross loans decreased by $20.7 million or 1.5% during the six months ended June 30, 2014, primarily due to normal loan pay down and charge off activity which exceeded new loan origination volume.

Deposits at June 30, 2014 increased $38.2 million or 2.5% from December 31, 2013 as a result of increases of $21.5 million or 8.8% in noninterest-bearing demand deposits, increases of $16.4

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million or 5.1% in time deposits less than $100 thousand, increases of $5.6 million in time deposits of $100 thousand or more, partially offset by decreases of $4.7 million or 7.5% in savings deposits.

Year-to-date average core deposits, which exclude brokered deposits and time deposits of $100 thousand or more, have increased by $19.7 million reflecting continued progress in furthering the Company’s funding strategy.

Capitalization

At June 30, 2014, the Company exceeded all of the regulatory capital minimums and Bank of Hampton Roads and Shore Bank were both considered “well capitalized” under all applicable regulatory capital standards.  Our consolidated regulatory capital ratios were Tier 1 Leverage Ratio of 11.10%, Tier 1 Risk-Based Capital Ratio of 14.06%, and Total Risk-Based Capital of 15.31%.

Caution About Forward-Looking Statements

Certain statements made in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise are not statements of historical facts, including statements about future trends, benefits, opportunities and strategies.  Although the Company believes that its expectations with respect to such forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from those expressed or implied by such forward-looking statements.  Factors that could cause actual events or results to differ significantly from those described in the forward-looking statements include, but are not limited to those described in the cautionary language included under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, and other filings made with the SEC.

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About Hampton Roads Bankshares, Inc.

Hampton Roads Bankshares, Inc. is a bank holding company headquartered in Virginia Beach, Virginia.  The Company’s primary subsidiaries are The Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961 (collectively, the “Banks”).  The Banks engage in general community and commercial banking business, targeting the needs of individuals and small to medium-sized businesses.  Currently, The Bank of Hampton Roads operates banking offices in Virginia and North Carolina doing business as Bank of Hampton Roads and Gateway Bank & Trust Co.  Shore Bank serves the Eastern Shore of Virginia, eastern Maryland and southern Delaware through seven full service banking offices, ATMs and loan production offices. Through various affiliates, the Banks also offer mortgage banking services.  Shares of the Company’s common stock are traded on the NASDAQ Global Select Market under the symbol “HMPR.”  Additional information about the Company and its subsidiaries can be found at www.hamptonroadsbanksharesinc.com.

 

 

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Use of Non-GAAP Financial Measures

 

This earnings press release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding our results of operations or financial position.  Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the Form 8-K filed related to this release.  The Form 8-K can be found on the SEC’s EDGAR website at www.sec.gov or our website at www.hamptonroadsbanksharesinc.com.

 

 

 

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